Dry electrical discharge machining (EDM) is an environmentally friendly modification of traditional EDM, but the material removal rate (MRR) of dry EDM is very low. A new machining method called powder mixed near dry EDM (PMND-EDM), which can improve MRR effectively, is proposed. In order to find the relationship between processing parameters and processing effect and improve processing efficiency, the MRR of PMND-EDM is studied systematically. The main processing parameters, such as peak current, pulse on time, pulse off time, powder concentration, flow rate, air pressure, and tool rotational speed, on MRR of PMND-EDM are studied in experiments. The experimental results showed that the MRR of PMND-EDM increased with the increase of peak current, pulse on time, flow rate, and air pressure, decreased with the increase of pulse off time and tool rotational speed, and increased firstly and then decreased with the increase of powder concentration. The significant test for process parameters on MRR of PMND-EDM is carried out through orthogonal design experiment. Analysis of variance for the result of orthogonal experiment indicates that peak current is significant at 99 % confidence level, pulse on time is significant at 95 % confidence level, and flow rate is significant at 90 % confidence level. Full factor experiments of peak current, pulse on time, and flow rate are conducted. The empirical formula of MRR is established based on experimental results. Its validity is demonstrated.